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Abstract:
We present results for two contingent valuation surveys conducted in Hamilton, Canada and the US to elicit WTP for mortality risk reductions. We find similar Value of Statistical Life estimates across the two studies, ranging from USD 930,000 to USD 4.8 million (2000 US dollars). WTP increases with risk reduction size, but varies little with respondent age: individuals aged over 70 years hold WTP values approximately one-third lower than other respondents. Respondent health status has limited effect on WTP. These results provide little or no evidence for adjusting VSL estimates used in policy analyses for the affected population's age or health status.

Value of a Statistical Life, Mortality Risks, Benefit-cost Analysis

Abstract:
We present the results of two contingent valuation surveys conducted in Hamilton, Canada and nation-wide in the US to elicit WTP for reductions in one's risk of death. We find that the Values of a Statistical Life implied by WTP are very similar across the two studies, and range from $930,000 to $4.8 million (2000 US dollars). WTP increases with the size of the risk reduction, but varies little with the age of the respondents: people older than 70 years of age hold WTP values that are about one-third lower than those of other respondents. This effect is significant in Canada but not in the US. Health status of the respondent has limited effect on WTP. In general, these results provide only little or no evidence that VSL used in environmental policy analyses should be adjusted for the age or health status of people whose lives are saved by environmental policies.

Value of a Statistical Life, mortality risks, benefit-cost analysis

Abstract:
We examine different market-based mechanisms and other incentives intended to promote the environmental remediation and reuse of brownfields. Policies that encourage cleanup and re-use of brownfields offer real estate developers reductions in regulatory burden, relief from liability for future cleanups once certain mitigation standards are met, and/or financial support for regeneration of brownfields.

We use conjoint choice experiments - a stated preference approach - to assess the responses of real estate developers to different mixes of these incentives. Our survey instrument was administered in person to a sample of developers and real estate professionals randomly intercepted at the Marche International des Professionnels de l'Immobilier (MIPIM) in Cannes, France, in March 2002.

Conditional and random-coefficient logit models of the responses to the choice questions indicate that developers find sites with contamination problems less attractive than others, and that they value liability relief. This confirms our expectation that contaminated sites are less desirable because of the associated cleanup costs, but refutes earlier claims that liability does not matter. Our developers are not deterred by prior contamination, once it has been cleaned up, suggesting that "contamination stigma" is not very important, and appreciate fast-track review of development and remediation plans, direct financial incentives, and flexible (negotiable) cleanup standards. Developers with prior experience with contaminated sites are more responsive to the policies than are inexperienced developers, especially for subsidies. Inexperienced developers are more responsive to liability relief and regulatory relief than they are to subsidies. Similar considerations hold true for larger developers.

Brownfields, Contaminated Sites, Real Estate Developers, Stated Preferences, Conjoint Analysis, Liability Relief, Regulatory Relief, Subsidies

Abstract:
This paper reports on a contingent valuation study eliciting willingness to pay for a public program for the preservation of lagoon, beach and infrastructure in the island of S. Erasmo in the Lagoon of Venice. A referendum dichotomous choice approach with a follow-up question is used to obtain information about willingness to pay from a sample of residents of the Veneto Region in Italy.

We use split samples to investigate the effect of providing different levels of information to respondents before asking the payment questions. Our experimental treatment is a reminder of possible reasons for voting in favor or against the proposed program before the referendum question. We find that reminding respondents of the reasons for voting for or against the public works increases WTP among less highly educated respondents, and decreases WTP among more highly educated respondents.

Contingent valuation, Effects of information

Abstract:
Particulate air pollution has less overall impact on nontraumatic deaths in Delhi, India, than in U.S. cities. But the deaths occur earlier in life in Delhi, which could mean a larger loss in life-years.

Cropper, Simon, Alberini, and Sharma report the results of a time-series study of the impact of particulate air pollution on daily mortality in Delhi. They find:

A positive, significant relationship between particulate pollution and daily nontraumatic deaths as well as deaths from certain causes (respiratory and cardiovascular problems) and for certain age groups.

In general, these impacts are smaller than those estimated for other countries, where on average a 100-microgram increase in total suspended particulates (TSP) leads to a 6-percent increase in nontraumatic mortality. In Delhi, such an increase in TSP is associated with a 2.3-percent increase in deaths.

The differences in magnitudes of the effects are most likely explained by differences in distributions of age at death and cause of death, as most deaths in Delhi occur before the age of 65 and are not attributed to causes with a strong association with air pollution.

Although air pollution seems to have less impact on mortality counts in Delhi, the number of life-years saved per death avoided is greater in Delhi than in U.S. cities-because the age distribution of impacts in these two places varies. In the United States particulates have the greatest influence on daily deaths among persons 65 and older. In Delhi, they have the greatest impact in the 15-to-44 age group. That means that for each death associated with air pollution, on average more life-years would be saved in Delhi than in the United States.

Large differences in the magnitude of effects do call into question the validity of the concentration-response transfer procedure. In that procedure, concentration-response relationships found for industrial countries are applied to cities in developing countries with little or no adjustment, to estimate the effects of pollution on daily mortality.

This paper-a product of Development Economics Research Group-is part of a larger effort in the group to examine the benefits and costs of pollution control. The study was funded by the Bank's Research Support Budget under research project Measuring the Health Effects of Air Pollution in Developing Countries: The Case of Delhi, India (RPO 679-96). Maureen Cropper may be contacted at mcropper@worldbank.org.

Abstract:
Valuing a change in the risk of death is a key input into the calculation of the benefits of environmental policies that save lives. Typically such risks are monetized using the Value of a Statistical Life (VSL). Because the majority of the lives saved by environmental policies are those of older persons, there has been much recent debate about whether the VSL should be lower for the elderly to reflect their fewer remaining life years. We conducted a contingent valuation survey in the UK, Italy and France designed to answer this question. The survey was administered in these three countries following a standardized protocol. Persons of age 40 and older were asked questions about their willingness to pay for a specified risk reduction. We use their responses to these questions to estimate the willingness to pay (WTP) for such a risk reduction and VSL. Our results suggest that the VSL ranges between Euro 1.052 and Euro 2.258 million. The VSL is not significantly lower for older persons, but is higher for persons who have been admitted to the hospital or emergency room for cardiovascular and respiratory problems. These results suggest that there is no evidence supporting that VSL should be adjusted to reflect the age of the beneficiaries of environmental policy. They are also partly inconsistent with the QALY-based practice of imputing lower values for persons with a compromised health status. We also find that income is positively and significantly associated with WTP. The income elasticities of the WTP increase gradually with income levels and are typically between 0.15 and 0.5 for current income levels in EU countries. We use the responses to the WTP questions to estimate the value of an extension in remaining life expectancy. We find that the value of a month's extension in life expectancy increases with age and with serious cardiovascular and respiratory illnesses experienced by the respondent. The value of a loss of one year's life expectancy is between Euro 55,000 and Euro 142,000.

Value of a statistical life, Willingness to pay, Life expectancy, Risk reduction, Contingent valuation

Abstract:
State voluntary cleanup programs (VCPs) were established in the 1990s to encourage cleanup and redevelopment of contaminated properties. I ask three questions: First, what properties are attracted to VCPs? Second, is there an interaction between VCP incentives and enterprise or brownfield zone incentives? Third, does participation in VCPs affect property values? Data from Colorados VCP suggest that (a) the main determinants of participation are the size of the parcel and the surrounding land use, (b) other incentives have little effect, (c) properties with confirmed contamination sell at a 43%-56% discount, and (d) participation does tend to raise the property price.

Abstract:
State Voluntary Cleanup Programs (VCPs) were established starting in the 1990s to encourage the environmental remediation and redevelopment of contaminated properties. These programs typically offer liability relief, subsidies and other regulatory incentives in exchange for site cleanup. This paper asks three questions: First, what type of properties are attracted to voluntary cleanup programs? Second, what is the interaction between these state programs and other incentives for remediation and economic development, such as Enterprise Zone and Brownfield Zone designations? Third, what is the effect of participation in the VCP on property values? We use data from Colorado's VCP to answer these questions. We find that most of the properties enrolled in this program were not previously listed on EPA's contaminated site registries, and that most applicants seek to obtain directly a "no further action" determination without undergoing remediation. The main determinants of participation are the size of the parcel and whether the surrounding land use is primarily residential, while other incentives have little effect. Properties with confirmed contamination sell at a 47% discount relative to comparable uncontaminated parcels, and participation tends to raise the property price, but this latter effect is not statistically significant. Taken together, these findings suggest that the participating properties are those with high development potential, and hint at the possibility that owners or developers may be seeking to obtain a clean bill of health from the State with only minimal or no cleanup efforts. Were these findings confirmed with data from other states, they would raise doubts about the effectiveness of voluntary programs in encouraging remediation and their usefulness in reversing some of the undesired effects of the Superfund legislation.

Brownfields, Contaminated sites, Voluntary cleanup programs, Incentives

Abstract:
This paper examines factors that may influence the estimates of the Value of a Statistical Life obtained from contingent valuation surveys that elicit the willingness to pay (WTP) for mortality risk reductions. We examine the importance of distributional assumptions, the choice of the welfare statistics of interest, the procedure for computing them, outliers, undesirable response effects, and internal validity of the WTP responses. We illustrate the importance of these factors using dichotomous-choice and open-ended WTP data from four recent contingent valuation surveys.

Contingent valuation, VSL, WTP, Risk reductions, Robustness, Outliers, Endogeneity

Abstract:
This study explores the potential of conjoint choice analysis for planning decisions in urban sites. We elicit people's preferences for regeneration projects that change the aesthetic and use character of specified urban sites. We focus on two sets of regeneration projects. The first set entails hypothetical transformations of an actual square with an important cultural and historical dimension. The other set of projects consists of hypothetical transformations of an abstract square. Each regeneration project is defined by aesthetic and use attributes. Our results suggest that people behaved in a way that is consistent with the Random Utility Model for the abstract square, and that there are both similarities and differences between preferences for the actual and the abstract square.

Conjoint Analysis, Conditional Logit, Consumer Behavior, Aesthetic and Use Values, Urban Regeneration

Abstract:
We use conjoint choice questions to ask public health and climate change experts, contacted at professional meetings in 2003 and 2004, which of two hypothetical countries, A or B, they deem to have the higher adaptive capacity to certain effects of climate change on human health. These hypothetical countries are described by a vector of seven attributes, including per capita income, inequality in the distribution of income, measures of the health status of the population, the health care system, and access to information. Probit models indicate that our respondents regard per capita income, inequality in the distribution of income, universal health care coverage, and high access to information as important determinants of adaptive capacity. A universal-coverage health care system and a high level of access to information are judged to be equivalent to $12,000-$14,000 in per capita income. We use the estimated coefficients and country sociodemographics to construct an index of adaptive capacity for several countries. In panel-data regressions, this index is a good predictor of mortality in climatic disasters, even after controlling for other determinants of sensitivity and exposure, and for per capita income. We conclude that our conjoint choice questions provide a novel and promising approach to eliciting expert judgments in the climate change arena.

Adaptive capacity, Climate change, Human health effects, Extreme events, Heat waves, Vector-borne illnesses, Conjoint choice, Vulnerability, Sensitivity

Abstract:
Using results from two contingent valuation surveys conducted in Canada and the U.S., we explore the effect of a latency period on willingness to pay (WTP) for reduced mortality risk using both structural and reduced form approaches. We find that delaying the time at which the risk reduction occurs by 10 to 30 years reduces WTP by more than half for respondents in both samples aged 40 to 60 years. Additionally, we estimate implicit discount rates equal to 8% for Canada and 4.5% for the U.S. - both well within the range established previously in the literature.

Value of a statistical life, Mortality risks, Benefit-cost analysis

Abstract:
This paper applies the travel cost method to visits to cultural sites in Armenia by domestic visitors. Respondents intercepted at four cultural monuments provided information on their visitation patterns, experience at the site, perception of the state of conservation of the monuments, and rating of the quality of the services and infrastructures. We combine actual trips with stated trips under hypothetical programs that would enhance the conservation of the monuments and improve one of (i) the cultural experience at the site, (ii) the quality of the infrastructure, or (iii) the quality of the services, and use the combined actual and stated trips to fit a panel data model. Our investigation shows that that there are significant use values associated with the four study monuments, and that conservation programs and initiatives that improve the cultural experience, or simply make it easier for the respondent to reach and spend time at the monument, are valued by domestic visitors and would encourage higher visitation rates.

Valuation of cultural heritage sites, Non-market valuation, Travel cost, Consumer surplus, Contingent behavior

Abstract:
We examine starting point bias in CV surveys with dichotomous choice payment questions and follow-ups, and double-bounded models of the WTP responses. We wish to investigate (1) the seriousness of the biases for the location and scale parameters of WTP in the presence of starting point bias; (2) whether or not these biases depend on the distribution of WTP and on the bids used; and (3) how well a commonly used diagnostic for starting point bias - a test of the null that bid set dummies entered in the right-hand side of the WTP model are jointly equal to zero - performs under various circumstances. Because starting point bias cannot be separately identified in any reliable manner from biases caused by model specification, we use simulation approaches to address this issue. Our Monte Carlo simulations suggest that the effect of ignoring starting point bias is complex and depends on the true distribution of WTP. Bid set dummies tend to soak up misspecifications in the distribution assumed by the researcher for the latent WTP, rather than capturing the presence of starting point bias. Their power in detecting starting point bias is low.

Anchoring, Dichotomous choice contingent valuation, Starting point bias, Double-bounded models, Estimation bias

Abstract:
We use contingent valuation to elicit WTP for a reduction in the risk of dying for cardiovascular and respiratory causes, the most important causes of premature mortality associated with heat wave and air pollution, among the Italian public. The purpose of this study is three-fold. First, we obtain WTP and VSL figures that can be applied when estimating the benefits of heat advisories, other policies that reduce the mortality effects of extreme heat, and environmental policies that reduce the risk of dying for cardiovascular and respiratory causes. Second, our experimental study design allows us to examine the sensitivity of WTP to the size of the risk reduction. Third, we examine whether the WTP of populations that are especially sensitive to extreme heat and air pollution - such as the elderly, those in compromised health, and those living alone and/or physically impaired - is different from that of other individuals. We find that WTP, and hence the VSL, depends on the risk reduction, respondent age (via the baseline risk), and respondent health status. WTP increases with the size of the risk reduction, but is not strictly proportional to it. All else the same, older individuals are willing to pay less for a given risk reduction than younger individuals of comparable characteristics. Poor health, however, tends to raise WTP, so that the appropriate VSL of elderly individuals in poor health may be quite large. Our results support the notion that the VSL is "individuated".

Contingent valuation, Willingness to Pay, Mortality risk reductions, Value of a Statistical life, Scope test, Cardiovascular and respiratory risks, Heat waves, Heat advisories, Adaptation to climate change, Air pollution, Premature mortality

Abstract:
We use data from a survey of residents of five Italian cities conducted in late Spring 2004 to estimate the discount rates implicit in (a) money v. future risk reductions and (b) money v. money tradeoffs. We find that the mean personal discount rate is 2% in (a) and 8.7% in (b). The latter is lower than the discount rates estimated in comparable situations in many recent studies, greater than market interest rates in Italy at the time, and exhibits modest variation with age and gender. The discount rate implicit in money v. risk tradeoffs is in line with estimates from studies in the US and Europe, and does not depend on observable individual characteristics.

Value of a statistical life, Latent risk reductions, Individual discount rates, Stated preference questions

Abstract:
Is there defensive behavior to prevent diseases such as diarrhea in Jakarta? Yes. And evidence suggests that individual defensive behavior is influenced by exposure to contamination and income and education - as expected. So, given the opportunity and knowledge, individuals try to modify the effect of contamination on the incidence of diarrhea. But that incidence is also affected by the water company and its problems, factors that lie outside the realm of the household. Alberini, Eskeland, Krupnick, and McGranahan develop and estimate a model of household defensive behavior and illness. Using cross-section data from a household survey in Jakarta, they observe defensive behavior (washing hands after using the toilet) consistent with expectations: Defensive effort intensifies with exposure to contamination, and with income and education. Variables associated with the cost of defensive behavior - such as interruptions in the water supply - reduce defensive behavior. The data suggest that wealthier households are no less vulnerable to illness. The water sources that supply the wealthy (the water company and private wells) are disrupted more often, interfering with their defensive behavior. There is also evidence, although weak, to support findings by van der Slice and Briscoe (1993): that pathogens originating within a household are less harmful to household members than are pathogens originating from other households. Given the opportunity and knowledge, individuals try to modify the effect of contamination on the incidence of diarrhea. But diarrhea`s incidence is also affected by decisions and problems outside the realm of the household, including the performance of the water company. This paper - a product of the Public Economics Division, Policy Research Department - is part of a larger effort in the department to analyze pollution control in developing countries. The study was funded by the Bank's Research Support Budget under the research project Pollution and the Choice of Policy Instruments in Developing Countries (RPO 676-48).

Abstract:
We develop a theoretical model of enforcement and compliance under HACCP regulation and use the FDA's seafood inspection records to examine: (1) if the FDA has targeted its inspections under HACCP regulation' (2) the effects of inspections on compliance with HACCP and plant sanitation standards' and (3) the relationship between compliance with HACCP and preexisting sanitation standards. There is some evidence of targeting based on product risk, but not on past compliance performance. The threat of an inspection increases the likelihood of compliance, but only for sanitation inspections, not for HACCP. HACCP compliance does not improve compliance with sanitation standards.

Abstract:
We use FDA's seafood inspection records to examine: (i) how FDA has targeted its inspections under HACCP regulation; (ii) the effects of FDA inspections on compliance with both HACCP and plant sanitation standards; and (iii) the relationship between HACCP regulations and pre-existing sanitation standards. We use a theoretical model of enforcement to derive hypotheses about FDA's targeting of inspections and firms' patterns of compliance. We test those hypotheses using econometric models of inspection and compliance. Contrary to the predictions of the theoretical model and to FDA's own stated policies, FDA does not seem to have targeted inspections based on product risk or past compliance performance. Firms' compliance strategies seemed to be broadly in accord with the predictions of the theoretical model. The threat of inspection increased the likelihood of compliance, although the deterrent effect was statistically significant for sanitation standards but not for HACCP. Firms tend to persist in compliance status, especially with respect to sanitation standards. Contrary to FDA's presupposition, however, HACCP compliance does not improve compliance with sanitation standards, suggesting that the two are not complementary.

HACCP, Food safety, Seafood, Enforcement, Regulatory compliance, Regulation

Abstract:
The authors interviewed commuters in Delhi, India, asking them to report their willingness to pay (WTP) to reduce their risk of dying in road traffic accidents in each of three scenarios that mirror the circumstances under which the majority of the road fatalities in Delhi occur. The WTP responses are internally valid, in the sense that WTP increases with the size of the risk reduction, income, and exposure to road traffic risks, as measured by length of commute and whether the respondent drives a two-wheeler. As a result, the value of a statistical life (VSL) is individuated - that is, it varies across groups of beneficiaries. For the most likely beneficiaries of road safety programs - the most highly exposed individuals - the VSL is about 150,000 PPP$.

Transport Economics Policy & Planning, Roads & Highways, Airports and Air Services, Road Safety, Insurance & Risk Mitigation

Abstract:
We use contingent valuation to place a value on the conservation of built cultural heritage sites in Armenia. When we present the hypothetical scenario in the questionnaire we spell out what would happen to the monuments in the absence of the government conservation program. We posit that respondents combine such information with their own prior beliefs, which the questionnaire also elicits, and that the WTP for the good or program is likely to be affected by these updated beliefs. We propose a Bayesian updating model of prior beliefs, and empirically implement it using the data from our survey. We find that uncertainty about what would happen to the monument in the absence of the program results in lower WTP amounts.

Valuation of Cultural Heritage Sites, Non-Market Valuation, Contingent Valuation, Bayesian Updating, Prior Beliefs

Abstract:
We use a panel dataset of UK workers to look for evidence of compensating wage differentials for workplace risk. Risk data are available at the four-digit industry level or at the three-digit occupation level. We discuss various econometric problems associated with the hedonic wage approach, namely measurement error, instability of the estimates to specification changes, and endogeneity. We find that if we assume a classical measurement error, the true risk signal would be completely drowned out in our data, which would imply a severe downward bias of the OLS coefficient on risk. But this prediction is at odds with our OLS estimates of the VSL, which are large, especially for blue collar workers. Further, the coefficient on risk changes varies dramatically with the inclusion or exclusion of industry and/or occupation dummies, as well as with the addition of nonfatal risk. When we instrument for risk, which we treat as endogenous with wage, and apply 2SLS or a procedure suggested by Garen (1988), we find negative associations between risk and wages for all workers, which is against the notion of compensating wage differentials, or, for blue-collar workers, extremely large VSL figures. Finally, we exploit the panel nature of our data to apply various estimation procedures (the "within" estimator, GLS and the Hausman-Taylor procedure) that correct for unobserved heterogeneity and endogeneity. The coefficient on risk is usually negative and insignificant for the sample of all workers, which once again questions the notion of compensating wage differentials. For blue-collar workers we obtain reasonable VSLs, but the association between risk and wages is not statistically significant. We conclude that if compensating differentials for risk exist, measurement error, other econometric problems, and the changing nature of labor markets prevent us from observing them. We also conclude that models and techniques for panel data that account for unobserved heterogeneity and endogeneity seem more reliable than the techniques typically employed with cross-sectional data.

Value of Life, Labor Market, Wage Hedonics

Abstract:
In this paper, we illustrate how surveys can be used to elicit the preferences of the public and of policymakers and city officials for regeneration projects at urban sites. Our methodology uses rating exercises, coupled with conjoint-choice stated preferences for the general public and with ranking exercises for the public officials and other stakeholders, and is then applied to investigate alternative reuses of the Venice Arsenale, Italy, and their economic, environmental and social impacts. One interesting feature of the conjoint choice questions for members of the public is that the responses to these questions can be used to estimate the social benefits of regeneration projects, i.e., how much people are willing to pay for these urban transformations. Another advantage of our approach is that it can be used seek and foster broader public participation into urban decisionmaking processes.

Land Use, Decision-Making, Cleanup, Sustainable Development, Local Economic Development, Choice Experiments

Abstract:
Conducting cost-benefit analyses of health and safety regulations requires placing a dollar value on reductions in health risks, including the risk of death. Compensating-wage differentials, which are often used to estimate the value of risk reductions, suggest that compensation for the loss of a statistical life in Indian manufacturing would be between 6.4 million and 15 million in 1990 rupees (roughly $150,000 to $360,000).

Conducting cost-benefit analyses of health and safety regulations requires placing a dollar value on reductions in health risks, including the risk of death. In the United States, mortality risks are often valued using compensating-wage differentials. These differentials measure what a worker would have to be paid to accept a small increase in his risk of death-which is assumed to equal what the worker would pay to achieve a small reduction in his risk of death.

Simon, Cropper, Alberini, and Arora estimate compensating-wage differentials for risk of fatal and nonfatal injuries in India's manufacturing industry. They estimate a hedonic wage equation using the most recent Occupational Wage Survey, supplemented by data on occupational injuries from the Indian Labour Yearbook.

Their estimates of compensating-wage differentials imply a value of statistical life (VSL) in India of 6.4 million to 15 million 1990 rupees (roughly $150,000 to $360,000 at current exchange rates). This number is between 20 and 48 times forgone earnings-the human capital measure of the value of reducing the risk of death.

The ratio of the VSL to forgone earnings implied by the study is larger than in comparable U.S. studies but smaller than the ratio implied by the only other compensating-wage study for India (Shanmugam 1997). The latter implies a ratio of VSL to forgone earnings of 73!

The authors caution that in India, as in the United States, compensating-wage differentials in the labor market may overstate what individuals would themselves pay to reduce the risk of death. They suggest using their estimates as an upper bound on willingness to pay to reduce risk of death, and forgone earnings as a lower bound.

This paper - a product of Infrastructure and Environment, Development Research Group - is part of a larger effort in the group to promote the use of benefit-cost analysis in evaluating environmental programs. The study was funded by the Bank's Research Support Budget under research project Valuing Mortality Reductions in India: A Study of Compensating Wage Differentials (RPO 680-84).

Abstract:
We use conjoint choice questions to investigate people's preferences for income and reductions in mortality risks delivered by contaminated site remediation policies. Our survey is self-administered using the computer by residents of four cities in Italy with severely contaminated sites. We estimate the Value of a Statistical Life to be about Euro 5.6 million for an immediate risk reduction. If the risk reduction takes place 20 years from now, however, the implied VSL is about Euro 1.26 million. The discount rate implicit in the responses to the conjoint choice questions is about 7%. People are willing to pay for permanent risk reductions, but not just any amount. Risk reductions in the nearer future are valued more highly than risk reductions in the more distant future. We also find that the VSL is "individuated", in the sense that it depends on observable individual characteristics of the respondents, familiarity with contaminated sites, concern about the health effects of exposure to toxicants, having a family member with cancer, perceived usefulness of possible government actions, and the respondent's beliefs about the goals of government remediation programs. Additional questions suggest that respondents discount lives, and do so at a discount rate in the ballpark of that implicit in their risk v. money tradeoffs.

Value of a Statistical Life, Latent Risk Reductions, Individual Discount Rates, Conjoint Choice Questions, Contaminated Sites, Remediation

Abstract:
This paper reports the results of a Travel Cost Method (TCM) study about the recreational use of the Lagoon of Venice for sports fishing. In April-July 2002, we conducted a mail survey of anglers with valid licenses fishing on the Lagoon of Venice to gather data on their fishing trips, behaviors and expenditures over the previous year. We also asked questions about trips that would be undertaken under hypothetical changes in the price of a trip and/or in the catch rate. Actual and hypothetical trips are combined to estimate single-site TCM demand function for trips. We propose several models to test whether it is acceptable to pool hypothetical and actual trip data, focusing on the respondent heterogeneity in the contingent behavior questions. Our models suggest actual and contingent behavior are driven by the same demand function, and can be pooled for estimation purposes. We use this estimated demand function, and its shift when the catch rate is improved, to compute angler surplus at the current catch rate and the change in surplus accruing from a 50% improvement in the catch rate. For the average angler in our sample, the former is about Euro 1,700 a year, while the latter is about Euro 2,800.

Sports fishing value, Travel cost method, Environmental improvement

Abstract:
Using the hedonic pricing approach, we investigate how the information released on public registries of contaminated and potentially contaminated sites affects nearby commercial and industrial properties in Baltimore, Maryland. We find that commercial and industrial properties are virtually unaffected by proximity to a site with a history of contamination. Knowing that the site is no longer considered contaminated does not have a rebound effect on property prices either. We also find that urban economic development policies, such as Empowerment Zones and Enterprise Zones, have little effect on property values. In sum, brownfield properties in Baltimore are not particularly attractive investments for developers, and there is little potential for self-sustaining cleanup based on appropriate fiscal incentives, such as Tax Increment Financing. It is doubtful that "one size fits all" measures to encourage the cleanup of contaminated sites can be successful in this context.

Contaminated sites registries, Distance to contaminated sites, Hedonic pricing model, Brownfields

Abstract:
Infill redevelopment - the transformation of previously used urban sites - is generally regarded as an important way to attain environmental and urban sustainability goals. At many locales, however, such urban renewal, community development, and tax revenue goals must be reconciled with historic preservation objectives. Are economic incentives and regulatory relief useful tools for encouraging reuse of abandoned or underutilized urban sites with historic buildings? Answering this question is of key importance for many European cities and for older US cities, and has important implications in terms of urban sustainability and "smart growth" initiatives. We use conjoint choice experiments to explore the relative importance of economic incentives, regulatory relief, land use and property regime offerings at underutilized historical sites in Venice, Italy. We survey real estate developers and investors, and ask them to choose between pairs of hypothetical projects in three Venice locations, as well as between one of these projects and the alternative to do a development project elsewhere. Statistical models of the responses to these choice questions indicate that respondents are sensitive to the price of acquiring the land (and hence to any policies that influence prices), and especially sensitive to the property regime that would be granted to developers and investors and to the allowable land use. Contrary to expectations, our respondents were insensitive to tightening or relaxing the stringency of building conservation restrictions. Our findings sound a common theme with Howland (2004), who warns that redevelopment of previously used sites in Baltimore is impaired by obsolete land uses, zoning and infrastructure (but not by suspected or actual contamination). We conclude that the City should focus on offering land uses and property regimes that are more in tune with developer demand.

Conjoint Choice Experiments, Real Estate Developers, Building Conservation Restrictions, Redevelopment Incentives, Brownfields, Infill Redevelopment

Abstract:
Speed limits were introduced in the Lagoon of Venice in 2002 to reduce wave motion, which damages environmentally sensitive areas in the broader Lagoon as well as buildings in the city of Venice. In this paper, we estimate the welfare losses experienced by recreational boaters as a result of the speed limits. We fit a single-site travel cost model to a sample of boaters intercepted as they depart from or arrive to marinas and launching ramps on the Lagoon. Our Poisson model is corrected for truncation and endogenous stratification. We construct three measures of the price per trip, which allow us to check the sensitivity of models and welfare estimates to possible measurement errors in the opportunity cost of time. Our results are robust to the measure of price used and conservatively peg the welfare losses of boaters to EUR 7.7-9.6 million per year. Even under conservative assumptions, the welfare losses of boaters are sufficiently large that, given current monitoring and enforcement of the speed limits, we believe there is a strong incentive for boaters to disregard the limits.

Travel cost method, Single-site model, Speed limits, Natural resources management

Abstract:
Cleaning up contaminated sites is one of the most important environmental policy priorities in many countries. Remediation of contaminated sites is attractive because it reduces risks to human health and ecological systems, and brings a host of potential social and economic benefits. Even when the burden of paying for cleanup is imposed on the parties that are responsible for the contaminated sites, in many countries government programs are established for enforcement purposes, to set cleanup standards, and to address contamination at those sites where the responsible parties are no longer in existence or do not have the means to pay for cleanup (orphan sites). This paper presents the results of a survey of the Italian public where we ask citizens to report their opinions about possible goals for such government programs and for cleanup. Our survey respondents are generally in favor of broad-based programs that protect the health of a diverse population - without restricting attention to cleanup beneficiaries in specific age groups or to specific exposure pathways. They also in favor of permanent remedies, even if they cost more, and of cleaning up sites even when the health risk reduction are experienced in the future, as is usually the case with carcinogenic contaminants.

Public Policy, Contaminated Sites, Permanent Remedies, Protection of Health and Ecosystems at Contaminated Sites

Abstract:
What is the rate at which people discount future lives saved? The answer to this question has important implications when comparing policies on the grounds of cost per life saved, especially in the context of hazardous waste site remediation, where risk reductions may occur at different times, depending on the permanence of the remedy. We estimate this rate by asking a sample of Italian residents to choose between saving 100 lives now and X lives in T years, where both X and T are varied to the respondents. Assuming constant exponential discounting, the responses to these questions imply a rate of time preference for saving lives of 12%. There is little evidence that this rate is systematically associated with observable individual characteristics of the respondent. There is, however, strong evidence that it declines with the time horizon when the lives would be saved, ranging from 16% for T=10 to less than 4% for T^3 40. We fit a hyperbolic discount model, finding that it yields a similar value of the discount function for T=10 (the shortest horizon we used in the survey), and that it discounts the future less heavily than the regular exponential discounting model for longer time horizon. We apply our estimated discount functions to two alternate remedial plans for a heavily contaminated area in Italy, and find that - due to the high estimated discount rates - the less permanent solution is found to be more cost-effective.

Value of a Statistical Life, Latent Risk Reductions, Individual Discount Rates, Rate of Time Preference for Saving Lives, Contaminated Sites, Remediation

Abstract:
The value of a statistical life (VSL) is a key input for estimating the benefits of policies that save lives. Several recent studies have obtained estimates of the VSL from contingent valuation surveys, i.e., by asking people to say how much they would pay to reduce their risk of dying. This article examines statistical factors that may influence the estimates of the VSL obtained from such surveys. We examine the importance of distributional assumptions, the choice of the welfare statistics of interest, the procedure for computing them, outliers, undesirable response effects, and internal validity of the willingness-to-pay (WTP) responses. We illustrate the importance of these factors using dichotomous-choice and open-ended WTP data from four recent contingent valuation surveys.

Abstract:
Infill redevelopment-the transformation of previously used urban sites - is generally regarded as an important way to attain environmental and urban sustainability goals. At many locales, however, such urban renewal, community development, and tax revenue goals must be reconciled with historic preservation objectives. Are economic incentives and regulatory relief useful tools for encouraging reuse of abandoned or underutilized urban sites with historic buildings? Answering this question is of key importance for many European cities and for older US cities, and has important implications in terms of urban sustainability and "smart growth" initiatives.

We use conjoint choice experiments to explore the relative importance of economic incentives, regulatory relief, land use and property regime offerings at underutilized historical sites in Venice, Italy. We survey real estate developers and investors, and ask them to choose between pairs of hypothetical projects in three Venice locations, as well as between one of these projects and the alternative to do a development project elsewhere.

Statistical models of the responses to these choice questions indicate that respondents are sensitive to the price of acquiring the land (and hence to any policies that influence prices), and especially sensitive to the property regime that would be granted to developers and investors and to the allowable land use. Contrary to expectations, our respondents were insensitive to tightening or relaxing the stringency of building conservation restrictions. Our findings sound a common theme with Howland (2004), who warns that redevelopment of previously used sites in Baltimore is impaired by obsolete land uses, zoning and infrastructure (but not by suspected or actual contamination). We conclude that the City should focus on offering land uses and property regimes that are more in tune with developer demand.

conjoint choice experiments, real estate developers, building conservation restrictions, redevelopment incentives, brownfields, infill redevelopment

Abstract:
Policy has increasingly shifted towards economic incentives and liability attenuation for promoting cleanup and redevelopment of contaminated sites, but little is known about the effectiveness of such policies. An example of such legislation is State Voluntary Cleanup Programs (VCPs), which were established in the US in the 1990s and to date have been implemented in almost every state. We examine Baltimore properties that participated in the Maryland VCP from its inception in 1997 to the end of 2006. Specifically, we examine what type of properties tend to participate in these programs, how these properties compare to other eligible but non-participating sites, and what is the redevelopment potential of VCP properties and implications towards open space conversion. We find that most applicants (66%) actually requested a "No Further Action Determination" directly, rather than proposing cleanup. VCP properties tend to be industrial, located in industrial areas, and away from residential neighborhoods. In more recent years larger industrial properties have increasingly enrolled in the program. The majority of sites are reused as industrial or commercial. In contrast to Alberini (2007), this suggests that pressure for residential development does not drive VCP participation. Based on differences in zoning requirements, the VCP may reduce demand for potentially contaminating activities on pristine land by as much as 1,238 to 6,444 acres, in Baltimore alone.

Brownfields, Contaminated Sites, Voluntary Cleanup Programs, Incentives

Abstract:
We use conjoint choice questions to investigate people’s tastes for cancer risk reductions and income in the context of public programs that would provide for remediation at abandoned industrial contaminated sites. Our survey was self-administered using the computer by persons living in the vicinity of an important contaminated site on the Italian National Priority List. The value of a prevented case of cancer is €2.6 million, but this figure does vary with income, perceived exposure to contaminants, and opinions about priorities that should be pursued by cleanup programs.

Value of a Statistical Case of Cancer, Conjoint Choice Experiments, Contaminated Sites, Abandoned Sites, Reuse, Remediation

Abstract:
This paper explores the issue of whether strict liability imposed on polluters has served to reduce uncontrolled releases of toxics into the environment. Because it imposes pollution damages upon the polluter, strict liability should create additional incentives for firms to handle hazardous substances more carefully, thus reducing the future likelihood of such uncontrolled releases.

Provisions making polluters liable for the damages caused by their polluting activities have been incorporated into a number of federal and state environmental laws passed over the last two decades, including CERCLA (1980) and the hazardous waste cleanup laws of many states. Despite the appeal of strict liability in hazardous waste cleanup, economic theory and anecdotal evidence point to the possibility that firms with limited assets may be sheltered from the economic incentives created by strict liability, and that firms may even select their asset level or corporate financial structure to minimize payment of damages in the event of an accident.

We wish to check whether these effects are pervasive, focusing specifically on firm liability for the cost of remediation at hazardous waste sites, as imposed by the "mini-Superfund" laws of many states. We use data on accidents and spills involving hazardous substances to establish whether their frequency has been systematically affected by the introduction of strict liability. The data come from a comprehensive database of events reported to the US EPA under their Emergency Response Notification System (ERNS).

Because ERNS begins in 1987, we are unable to establish whether the passage of the federal Superfund law has affected the occurrence of accidental releases. Instead, we examine whether the strict liability feature of state cleanup programs, which varies across states and over time, has had any additional influence on the number of accidental events, above and beyond that of the federal Superfund, and if such effects depend on firm size and other factors.

We estimate regressions relating the frequency of spills of selected chemicals used in manufacturing to the type of liability in force in a state. We control for the extent of manufacturing activity in the state, and include in the regression other program features that might alter firms' expected outlays in the event of an accident, and thus affect firms' incentives to take care.

Results vary with the chemical being analyzed. For some chemicals, such as halogenated solvents, the presence of strict liability does not provide any additional explanatory power for the number of spills beyond what is achieved by the number of establishments and the sectoral composition of manufacturing. For other families of chemicals (acids, ammonia and chlorine), spills appear to be more numerous where strict liability is imposed, even after we control for the extent and type of manufacturing. We present several alternative models and tests to shed light on this initial finding, looking for evidence about the effects of firm size. Separate regressions for the two liability regimes suggest that only under strict liability are small firms responsible for a disproportionate number of spills.

Abstract:
This paper introduces model specifications that can be used to explain response incentive effects that might occur with discrete response contingent valuation data when follow-up responses are collected. The models allow for possible random response shocks, structural shifts in willingness to pay between payment questions and heteroskedasticity between and within responses. Three well-known contingent valuation survey datasets that include follow-up payment questions are used to empirically test the models.